The Green Sheet Online Edition

What would you do?

Recently, on GS Online's MLS Forum, THECREDITCARDMAN described the following situation and asked for advice:

You sign up a small to average merchant five years ago (now out of contract). They call saying they are selling the biz. You are ready to sign the new owner. New owner, same biz name, location. The ISO (your primary) you put the deal through five years ago has a policy of no bonus money for this situation (not new revenue). Other ISOs you sell for will give you $300 sign-up money. Let's say for the sake of this discussion that the splits are close enough where the residual would be insignificantly different. As the agent, do you grab the $300? As the ISO, do you feel the policy is justified? Do you feel loyalty should supersede economics?

Following are excerpts from the responses he received. For the full discussion, see the "What would you do?" thread on the MLS Forum, accessed via the Forums link on our home page, www.greensheet.com.

Five years would literally put them outside the contract, and in renewals. But even so, it's a new merchant. The old merchant is closing, technically. It's a new merchant with a new owner. So, my philosophy is this: if credit has to approve the new owner, as well as the merchant, it's a new merchant, not repeat business. But with that said, I am not a great fan of the bonus programs anyway. I think they take money out of your pocket. But if it's that important, that is how we treat it; it's a new merchant, period.

- CLEARENT

I can see a bit of gray, depending on who the 'new owner' is. If they actually sold it to someone new, it's one thing; if the 'new owner' is, say, the old owner's kid, that's something else. Here's how I see it: new merchant ID = new merchant. You make a business decision every time you place a new merchant. That is all this is, a business decision.

The new owner doesn't have to sign with the existing company, so the ISO should be looking at them as new business. If they don't want to see it that way, that is their business decision. ... If I were in your shoes ... pick up the phone and call your ISO, have an open and frank discussion with them about the situation, and make a decision from that point.

ISOs have to have policies in place to protect themselves and to try to prevent salespeople from 'gaming the system.' Since it doesn't sound like that is what is happening, you might just be surprised with the outcome of that phone call.

- JDECKARD

I think your ISO is right in not paying out any bonus. It's the same volume you've always had, and to insist on a bonus should be beneath you. Moving the merchant could jeopardize your relationship with your ISO. ... Take the high road, I say.

- DIEGO

If it is a new owner, it would not be considered moving merchants and would not break any nonsolicitation contracts I've seen.

- GMARTIN